Pre-COVID economy wasn’t that great
As vaccinations progress, it is great to see folks out after so much sequester. It is also a pleasure to engage in political discourse again without recrimination.
Sadly, the Donald Trump era left me unable to have political and policy discussions with many I consider friends.
In such conversations, over drinks or dinner, I have heard many conservative friends articulate a belief that the economy in the Trump era, aside from the precipitous fall under COVID-19, was great and more importantly, great for all (to include low, moderate and middle-income Americans).
I strongly disagree.
I have spent my life, since the early ‘90s, with one foot inside the low and moderate-income world. I can concede that employment grew, and poverty shrank during in the last four years, pre-pandemic, as it had been doing since 2010. Those improvements, by themselves, are not enough to warrant such revisionist history.
There are undoubtedly things that Trump did around the fringes that helped the economy along. If the tax cut was the biggest achievement aimed at stimulating the economy we should at least acknowledge that 80% of the benefits went to the top 1%, according to the Tax Policy Center.
You can argue trickle-down economics and that jobs were created but there was no steep increase in job creation as a result. Employment levels improved from 2010 through to the beginning of the pandemic. The pace of those improvements was actually a bit slower under Trump than under President Barack Obama.
The actual annual cash impact of the tax cuts to LMI individuals and families would barely buy groceries for a week or two let alone change their lives. Households at the median, might see enough benefit from the tax cuts to pay a fair portion of one month’s rent, hardly life changing.
How about wage increases? According to the Bureau of Labor Statics, during Obama’s second term, the average weekly earnings went up 4.9%.
Over President George W. Bush’s eight years in office, wages also increased by 4.2%. Under President Bill Clinton, they went up by 6.4%. Those figures were up 2.3% under Trump, before COVID. Call that close to Bush and Obama and slower than Clinton.
One of the great signs of what too many call a great economy is the stock market. True the market has been on an amazing ride up since it hit bottom in March of 2009. The return to pre–Great Recession levels took four years and the ride up since has been fairly consistent, through Obama’s second term and through to the beginning of the pandemic under Trump.
The important point to consider is the distribution of stock ownership. Only a little over half the US population owns stock and therefore participated in the market rise. You know it is not the lower half.
Take for a moment the disproportionate number of people of color in the LMI bands. Given the events and rhetoric during the Trump era could you honestly believe things did not get worse for them, economically and otherwise?
So, we could debate the relative merits of Trump’s work on peace in the Middle East, immigration (well maybe not), putting China, Iran and Russia in check (well maybe not the latter). I have no great claim to knowledge and insight in those arenas.
However, as you put some historical perspective on the Trump presidency, please accept my expertise in the LMI world. The Trump era was NOT good for the LMI, pre or post-pandemic.
Mike Pitchford is the recently retired CEO of a not-for-profit affordable housing developer. He serves on the Boards of the Maryland Affordable Housing Coalition, The Anne Arundel Affordable Housing Coalition and Arundel Community Development Services. He is a member of the Housing Affordability Task Force in Annapolis.